A Flee reaction is exactly what it sounds like: the unit turns tail and runs rather than receive the charge.
You'll normally want to declare a Flee reaction if you think that your unit has no chance of surviving the ensuing fight. A Flee reaction is not always voluntary – units that are already fleeing must declare a Flee reaction, and certain terrifying creatures may force an otherwise steady to unit to Flee instead of other options (see the rules for Terror).
If a unit chooses a Flee reaction, for whatever reason, use the following procedure:
Immediately turn the unit about its centre so that it is facing directly away from the centre of the charging enemy unit (ignore other units or impassable terrain). This turn is 'free' and does not reduce the distance the unit will flee.
After turning, the unit flees 2D6" in the direction it is facing, as described under Move Fleeing Units in the Compulsory Moves sub-phase.
It should be noted that a Flee reaction does not guarantee escape from oncoming chargers. If the fleeing unit rolls poorly and the chargers roll well, the fleeing unit might yet be caught, as we'll discuss later.